The impact of entrepreneurs’s financial literacy on innovation within small and medium-sized enterprises
利用2015和2017年中国中小企业调查数据，研究发现企业家金融素养与创新正相关，且风险容忍度是传导机制，对政策制定有启示。
This article analyses the impact of an entrepreneur’s financial literacy upon innovation within small- and medium-sized enterprises (SMEs) and, in so doing, extends human capital theory to consider the effect of financial literacy on risky investment decisions. Using a large survey dataset of Chinese SMEs in 2015 and 2017, our findings suggest that financial literacy is positively associated with innovation; positive relationships are robust to different innovation metrics. In addition, we find that gender matters, as male owners appear to promote more innovations, while firm size is positively associated with innovation. Additional analysis suggests that risk tolerance is a transmission mechanism for the impact of financial literacy on innovation. Our results corroborate previous studies showing that individuals with greater financial literacy make sound personal financial decisions and so have important public policy implications.